This may be valuable to your readers having trouble with the iDVD 7.0.3 update. Here's the scenario: A whole lab of machines imaged from the same valid, clean installation of Mac OS X 10.5.6 and a working iLife '08 installation suddenly all refuse to make DVDs with iDVD after the 7.0.3 update.

It turns out that there is something wrong with the iDVD 7.0.3 update, and the problem is observable on Intel and PowerPC systems running Mac OS X 10.5.6 and QuickTime 7.5.5 or 7.6. When attempting to add a movie file of any format (m4v or mov, for instance) to a new iDVD project or One Step DVD, iDVD 7.0.3 refuses to accept it, saying that the movie is an "unsupported format" or "unsupported file type."

Reverting to iDVD 7.0.2 corrects the problem, but as far as I can tell, the heart of the problem is in the iDVD executable itself (iDVD.app/Contents/MacOS/iDVD), so the rest of the 7.0.3 update should be just fine. Here's a procedure to keep the rest of the 7.0.3 update while downgrading the iDVD executable to version 7.0.2. This procedure is superior to simply restoring a 7.0.2 version because you get the "good parts" of the 7.0.3 update and Software Update won't remind you of (or automatically download) the iDVD 7.0.3 update, because it thinks it's already installed.

Update.... After you follow this guide to revert to the iDVD 7.0.2 executable and you confirm that it is working, you can put back your newer one, in my case the 7.0.4 executable and it will now work. Not sure why this works, but my newer executable is larger and probably has some functionality in it that I don't want to lose.... now that it's working.

Alert - Update from my previous post about changing back to the iDVD 7.0.4 executable after using the 7.0.2 version.... although 7.0.4 will no longer show "unsupported file type", you may be unable to render your files and receive the message - "Error during rendering / encoding". In this case, put the iDVD 7.0.2 executable back as noted in the hint and your files will render normally.